So now we hear it straight from the CEO of an insurance company: “There’s no state that is more affluent, more profitable…than Massachusetts.” More profitable indeed !

The wordswere spoken by Russ Buchmueller, president and CEO of the PURE Insurance Co., of Florida, which, as of a few weeks ago, is offering property insurance to the state’s financial elite, including Cape Cod.

The “elite” are owners of homes valued at more than $1 million who can afford caretakers, alarm systems and other protections that decrease odds the insurer will ever have to pay off. It’s a crap shoot heavily favoring the house. In other words, it shakes out as getting something for almost nothing, a minimal risk.

More profitable indeed: Paula Aschettino, founder and guru of the Eastham-based Citizens for Homeowners Insurance Reform, a grassroots movement to end gouging by insurers, simultaneously was reporting on the excessive insurer profits in this state as revealed in the latest Massachusetts Homeowners Insurance Report.

Aschettino compares insurer returns on net worth between Massachusetts and the rest of nation to conclude that “private market profits are unconscionable” in Massachusetts and particularly on Cape Cod.

State insurer profit over the five-year period 2004-2008 was 21.2 percent compared to 6.6 percent for the rest of the nation. Statistics for the decade ending in 2008 showed profit in the Bay State at 17.3 percent vs. 4.6 percent in the rest of the nation. “Anything over 10 percent is purely excessive,” notes Aschettino, (but) “in Massachusetts it is grossly excessive. It’s gouging, pure and simple.”

Nowhere has this alleged inequity in profits been felt more than along the Massachusetts coast, much of that coast being Cape Cod.

Is this rip-off sustainable when a million homes have been foreclosed on nationally, the jobless rate hovering, property taxes crawling upward and energy and food costs are snaking up like ivy on brick?

State insurers have based their unpleasant, excessive and biased premiums along our shores on questionable computer models that Aschettino claims are secret and based on named-storm models from places, like Florida, for example, rather than Massachussetts’ own well-documented experiences with hurricanes it can withstand.

The PURE company, as reported in the Cape Cod Times, is what’s known as a “mutual ownership” – owned by the insured rather than stockholders demanding higher profits. The Cape’s Rogers and Gray insurance agency is selling PURE policies because, says the agency, they offer from 18 to 25 percent savings. For the wealthy homeowners, not the poorer ones.

This is the second break for the wealthy. The first was issued by the Republicans who forced President Obama to include the rich in extending the Bush tax cuts just so the Middle Class tax would not increase.

PURE expects to write only a few thousand policies in the entire state to really reduce its risk, in other words, trying with all its might to bet only on a sure thing. Top insurer executives aren’t in the business to be nice guys. They are in it to line their and stockholder pockets with somebody else’s cash, otherwise known as “easy money.”

The more the risk is minimized or the more premiums are increased, the more the insurance industry takes on some characteristics of a Ponzi scheme…packing in money but not paying out. How many Cape Codders paid into homeowner insurance companies for more than 20 or even 30 years and were summarily dropped without ever collecting a dime?

Low-risk strategy has been clearly demonstrated here in Massachusetts and particularly on Cape Cod as policies have been unceremoniously canceled by insurers, even for moderately priced homes as much as a mile or more – a safe distance - from the shore. It forced the average family into coverage of last resort with FAIR, a state-insurer sponsored program that itself has demonstrated a voracious appetite for your cash, like a python slowly squeezing the life out of a sheep.

But where is the outrage?

Perhaps the Cape has gotten so used to being overcharged by insurers that it no longer seems like gouging, but more like an abnormality, a twitch or a limp, that now seems normal.

Aschettino continues her struggle to right a wrong and may be joined on her side of the teeter-totter by new state Senator Dan Wolf to try to balance an increasingly one-sided industry.

Meanwhile, the rich get richer and the poor get poorer.

Never miss a story

Choose the plan that's right for you.
Digital access or digital and print delivery.